Investors may need to be more careful when putting money into China, but there are still investing opportunities in world’s second largest economy, according to the chairman of Standard Chartered.

Stocks of Chinese companies have seen dramatic falls in recent months as Beijing introduces new regulations affecting sectors such as technology and education.

This week, Chinese electric vehicle stocks dropped after a minister said the country has “too many” EV makers.

“There’ve been some articles in the media about — is China becoming uninvestable? I don’t think so,” Jose Vinals told CNBC’s Hadley Gamble on Wednesday.

A number of sectors may be “a little bit more challenged now” and investors need to look more carefully at what investments they are making, he said.

“But overall, I think China continues to be a tremendous source of opportunity for the private sector,” he said, pointing out Beijing has slowly opened up its financial sector, granting some international firms access.

The regulatory crackdown in China has been interpreted differently by big names in the financial world, including Ray Dalio, George Soros and David Roche.

Separately, Vinals said he doesn’t expect inflation to be a big problem.

“I still subscribe to the view that inflation that we’re seeing in the United States and in other Western countries in particular … has an important transitory component,” he said.

Fed Chair Jerome Powell similarly believes that inflation will soon subside and has said he wants to see more strong employment reports before the central bank starts paring back its bond purchases.

Vinals said many Western countries are operating below their maximum economic potential, adding the Federal Reserve is likely to hike rates early next year.

“My baseline is that inflation will not be a big problem. But there is a risk that it may become more of a problem than we think,” he said, acknowledging that it would “complicate things” for the world.

“But I see [inflation] more as a downside risk to the global economic recovery, than as the base case for the economic outlook,” he said.